With rising home prices and increased costs of living, more Canadians are relying on assistance from family and friends to help make homeownership a reality.
A recent report from CIBC says that 31% of first-time homebuyers received financial support from family members – a significant increase from just 20% in 2015. The report also highlighted that the average family gift for a home purchase was $115,000 – a 73% increase from 2019. This growing trend underscores the important role families are playing in helping their loved ones enter the housing market.
In addition to direct financial gifts, the 2024 Mortgage Consumer Survey from Canada Mortgage and Housing Corporation (CMHC) revealed that 28% of first-time buyers lived rent-free with family or friends before purchasing. This suggests that many individuals are relying on familial support to save for a down payment, which can be one of the largest barriers to homeownership.
Multiple ways to help with homeownership
If you’re thinking of helping a loved one buy a home, there are several options to consider. Financial gifts, loans or co-signing on a mortgage are all ways families are lending a hand.
It’s essential to understand the financial and legal implications of each option. For instance, if you’re gifting money, it’s important to be aware of tax rules and potential impacts on your estate. Similarly, co-signing a mortgage comes with shared responsibility, so it’s crucial to ensure that everyone involved understands their obligations.
Your mortgage agent can guide you through these options and help you make the best decision based on your specific needs. Whether you’re gifting funds or co-signing a loan, they’ll provide expert advice to ensure a smooth and successful homebuying process.
Have questions about how to help make your loved one’s homeownership dream a reality? Answers to all your questions are a call or email away!